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What is balance in collins capital account at end of year

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Question: A partnership begins its first year with the following capital balances:

Alfred, Capital $ 50,000

Bernard, Capital 60,000

Collins, Capital 70,000

The articles of partnership stipulate that profits and losses be assigned in the following manner:

• Each partner is allocated interest equal to 5 percent of the beginning capital balance.

• Bernard is allocated compensation of $18,000 per year.

• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.

• Each partner is allowed to withdraw up to $5,000 cash per year.

Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year?

Reference no: EM132738307

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